Broader or deeper? Exploring the most effective intervention profile for public small business support

Most advanced economies offer publicly financed advice services to start-up firms and SMEs. In England, local or regional Business Links organisations have provided these services, and divided their support into nonintensive one-off contacts providing information or advice and more intensive support involving a diagnostic process and repeated interaction with firms. A key choice for Business Link managers is how to shape their intervention strategies, balancing resources between intensive and nonintensive support. Drawing on resource dependency theory, we develop a typology of intervention strategies for Business Links in England which reflects differences in the breadth and depth of the support provided. We then test the impacts of these alternative intervention models on client companies using both subjective assessments by firms and econometric treatment models that allow for selection bias. Our key empirical result is that Business Links’ choice of intervention strategy has a significant effect both on actual and on perceived business outcomes, with our results emphasising the value of depth over breadth. The implication is that where additional resources are available for business support these should be used to deepen the assistance provided rather than extend assistance to a wider group of firms.

When in Rome ... ?:Human resource management and the performance of foreign firms operating in India

Purpose: The purpose of the paper is to examine the kind of HRM practices being implemented by overseas firms in their Indian subsidiaries and also to analyze the linkage between HRM practices and organizational performance. Design/methodology/approach: The paper utilizes a mixture of both quantitative and qualitative techniques via personal interviews in 76 subsidiaries. Findings: The results show that while the introduction of HRM practices from the foreign parent organization is negatively associated with performance, local adaption of HRM practices is positively related with the performance of foreign firms operating in India. Research limitations/implications: The main limitations include data being collected by only one respondent from each firm, and the relatively small sample size. Practical implications: The key message for practitioners is that HRM systems do improve organizational performance in the Indian subsidiaries of foreign firms, and an emphasis on the localization of HRM practices can further contribute in this regard. Originality/value: This is perhaps the very first investigation of its kind in the Indian context. © Emerald Group Publishing Limited.

Technological diversification within UK’s small serial innovators

This paper investigates the determinants of technological diversification among UK’s small serial innovators (SSIs). Using a longitudinal study of 339 UK-based small businesses accounting for almost 7000 patents between 1990 and 2006, this study constitutes the first empirical examination of technological diversification among SMEs in the literature. Results demonstrate that technological diversification is not solely a large firm activity, challenging the dominant view that innovative SMEs are extremely focused and specialised players with little technological diversification. Our findings suggest a nonlinear (i.e. inverse-U-shaped) relationship between the level of technological opportunities in the environment and the SSIs’ degree of technological diversification. This points to a trade-off between processes of exploration and exploitation across increasingly volatile technology regimes. The paper also demonstrates that small firms with impactful innovations focus their innovative activity around similar technological capabilities while firms that have introduced platform technologies in the past are more likely to engage in technological diversification.

Technological and organisational change in small- to medium-sized manufacturing companies:a learning organisation perspective

This paper examines the extent to which a learning organisation perspective is attainable in small- to medium-sized manufacturing companies. An audit tool is developed from the literature on organisational learning and recognised processes that lead towards becoming a learning organisation. The paper focuses on the application of the audit tool in three UK automotive component suppliers which are all experiencing pressures for change imposed by the major vehicle manufacturers. The main changes are concerned with tiering of the supply chain and substantial delegation of responsibilities to component suppliers including an increasing emphasis on innovation and continuous improvement. The companies presented in the paper are taken from a research project into the impact of changes in supply chain relationships on the operation of small- and medium-sized manufacturing firms in the West Midlands region of the UK. The ways in which the companies are responding to change are presented together with the results of a self-assessment using the developed audit tool. These results suggest that companies of this type tend to focus on change in those areas that involve least challenge to the established power and authority of management.

Exporting and innovation performance: analysis of the Annual Small Business Survey in the UK

This paper analyses the determinants of the export propensity of UK small and medium-sized enterprises (SMEs) based on the 2004 Annual Small Business Survey. Particular emphasis is placed upon the relationship between innovation activities (distinguishing product from process innovation) and export performance. In general the data suggest that some 17 per cent of firms within this group sell outside the UK. Businesses that export are also characterized by high levels of innovation activity (43 per cent of exporters innovate in products, 27 per cent innovate in process and 21 per cent innovate in both). When considering product and process innovation independently we find that both impact positively on the decision to export. However, once we consider the interdependence between both innovation activities, we find no robust evidence that process innovation increases the probability to export beyond product innovation.

Stock market efficiency, the small firm effect and cointegration

The cointegration methodology commonly used for testing the efficiency of the foreign exchange market is applied to a sample of UK share prices. Specifically we test for static market efficiency in the share prices of small and large firms, using monthly data from January 1975 to December 1989. The empirical findings provide evidence of market efficiency for portfolios of large firms but of inefficiency for small firm portfolios. These results are indicative of a small firm effect in the UK stock market.

Factors affecting end-user computing sophistication in small business

This thesis describes research on End-User Computing (EUC) in small business in an environment where no Information System (IS) support and expertise are available. The research aims to identify the factors that contribute to EUC Sophistication and understand the extent small firms are capable of developing their own applications. The intention is to assist small firms to adopt EUC, encourage better utilisation of their IT resources and gain the benefits associated with computerisation. The factors examined are derived inductively from previous studies where a model is developed to map these factors with the degree of sophistication associated with IT and EUC. This study attempts to combine the predictive power of quantitative research through surveys with the explanatory power of qualitative research through action-oriented case study. Following critical examination of the literature, a survey of IT Adoption and EUC was conducted. Instruments were then developed to measure EUC and IT Sophistication indexes based on sophistication constructs adapted from previous studies using data from the survey. This is followed by an in-depth action case study involving two small firms to investigate the EUC phenomenon in its real life context. The accumulated findings from these mixed research strategies are used to form the final model of EUC Sophistication in small business. Results of the study suggest both EUC Sophistication and the Presence of EUC in small business are affected by Management Support and Behaviour towards EUC. Additionally EUC Sophistication is also affected by the presence of an EUC Champion. Results are also consistent with respect to the independence between IT Sophistication and EUC Sophistication. The main research contributions include an accumulated knowledge of EUC in small business, the Model of EUC Sophistication, an instrument to measure EUC Sophistication Index for small firms, and a contribution to research methods in IS.

An examination of the appropriateness of the contemporary strategic management models for the Greek small manufacturing enterprises

The starting point of the project was the observation that strategic management is absent in small businesses. The first objective of the project was to examine the reasons causing this situation in Greece, the second one, to examine the appropriateness of the contemporary models of strategic planning for the Greek S.M.E.s, and the third to examine the appropriateness of the alternative approaches to strategic management for the Greek S.M.E.s. The term appropriateness includes (a) the ability of managers to use the models and (b) the ability of the models to assist the managers. The results of the research indicate that none of the two above conditions exists, hence, it is suggested that the contemporary models of strategic management are inappropriate for the Greek S.M.E.s. Many previous research projects on the topic suggest that since the strategic decision making process in S.M.E.s is informal, the whole process is absent or ineffective. Current trends in S.M.E.s' strategic management do not consider the informality of the strategic decision making process as a kind of managerial illness, but as a managerial characteristic. The use of sophisticated data collection and analytical methods does not indicate successful strategic decisions, but it indicates the method large firms use to manage their strategy. According to the literature review, the S.M.E.s' managers avoid the use of the contemporary models of strategic management, because they do not have the knowledge, the resources or the time. Another thesis, expressed by some firms' specialists, suggests that small firms are different from large ones, hence their practice of strategic management should not follow the large firm's prototypes.

Technical entrepreneurship in the UK:an examination of the relationship between the previous occupational background of the technical entrepreneur and the management of the small technology-based venture

With the growing appreciation of the contribution of small technology-based ventures to a healthy economy, an analysis of the individual who initiates and manages such ventures - the technical entrepreneur - is highly desirable, predominantly because of the influence of such an individual on the management and future strategy of the venture. An examination of recent research has indicated that a study of the previous experience and expertise of the entrepreneur, gained in previous occupations, may be highly relevant in determining the possible success of a new venture. This is particularly true where the specific expertise of the entrepreneur forms the main strategic advantage of the business, as in the case of small technology-based firms. Despite this, there has been very little research which has attempted to examine the relationship between the previous occupational background of the technical entrepreneur, and the management of the small technology-based firm. This thesis will examine this relationship, as well as providing an original contribution to the study of technical entrepreneurship in the UK. Consequently, the exploratory nature of the research prompted an inductive qualitative approach being adopted for the thesis. Through a two stage, multiple-site research approach, an examination was made of technical entrepreneurs heading award-winning technology-based small firms in the UK. The main research questions focused on management within the firm, the novelty and origin of the technology adopted, and the personal characteristics of the entrepreneur under study. The results of this study led to the creation of a specific typology for technical entrepreneurs, based on the individual's role in the development of technology within his previous occupation.

The finance of biotechnology:investment in new biotechnology firms by British venture capitalists-attitudes to, and evaluation of, business proposals

A notable feature of the recent commercialisation of biotechnology has been the success of 200 or so new firms, established in America since 1976, in exploiting specialised market niches. A key factor in their formation has been the ready availability of venture capital funding. These firms have been instrumental in establishing America's lead in exploiting biotechnology. It is this example which Britain has attempted to emulate as part of its strategy for developing its own biotechnology capabilities. This thesis investigated some aspects of the relationship between biotechnology and venture capital, concentrating on the determinants of the venture capitalist's investment decision. Following an extensive literature survey, two hypothetical business proposals were used to find what venture capitalists themselves consider to be the key elements of this decision. It was found that venture capitalists invest in people, not products, and businesses, not industries. It was concluded that venture capital-backed small firms should, therefore, be seen as an adjunct to the development of biotechnology in Britain, rather than as a substitute for a co-ordinated, co-operative strategy involving Government, the financial institutions, industry and academia. This is chiefly because the small size of the UK's domestic market means that many potentially important innovations in biotechnology may continue to be lost, since the short term identification of market opportunities for biotechnology products will dictate that they are insupportable in Britain alone. In addition, the data analysis highlighted some interesting methodological issues concerning the investigation of investment decision making. These related especially to shortcomings in the use of scoresheets and questionnaires in research in this area. The conclusion here was that future research should concentrate on the reasons why an individual reaches an investment decision. It is argued that only in this way can the nature of the evaluation procedures employed by venture capitalists be properly understood.

Evaluating small business performance : a matched pair analysis of African Caribbean owned businesses in the UK

African Caribbean Owned Businesses (ACOBs) have been postulated as having performance-related problems especially when compared with other ethnic minority groups in Britain. This research investigates if ACOBs may be performing less than similar firms in the population and why this maybe so. Therefore the aspiration behind this study is one of ratifying the existence of performance differentials between ACOBs and White Asian Owned Businesses (WAOBs), by using a triangulation of methods and matched pair analysis. Every ACOB was matched along firm specific characteristics of age, size, legal form and industry (sector), with similar WAOBs. Findings show support for the hypothesis that ACOBs are more likely to perform less than the WAOBs; WAOBs out-performed ACOBs in the objective and subjective assessments. Though we found some differentials between both groups in the entrepreneur’s characteristics and various emphases in strategic orientation in overall business strategy. The most likely drivers of performance differentials were found in firm activities and operations. ACOBs tended to have brands that were not as popular in the mainstream with most of their manufactured goods being seen as ‘exotic’ while those by WAOBs were perceived as ‘traditional’. Moreover, ACOBs had a higher proportion of clients constituting of individuals than business organisations while the WAOBs had a higher proportion consisting of business organisations.

Design and construction for traditional house building

This study is concerned with quality and productivity aspects of traditional house building. The research focuses on these issues by concentrating on the services and finishing stages of the building process. These are work stages which have not been fully investigated in previous productivity related studies. The primary objective of the research is to promote an integrated design and construction led approach to traditional house building based on an original concept of 'development cycles'. This process involves the following: site monitoring; the analysis of work operations; implementing design and construction changes founded on unique information collected during site monitoring; and subsequent re-monitoring to measure and assess Ihe effect of change. A volume house building firm has been involved in this applied research and has allowed access to its sites for production monitoring purposes. The firm also assisted in design detailing for a small group of 'experimental' production houses where various design and construction changes were implemented. Results from the collaborative research have shown certain quality and productivity improvements to be possible using this approach, albeit on a limited scale at this early experimental stage. The improvements have been possible because an improved activity sampling technique, developed for, and employed by the study, has been able to describe why many quality and productivity related problems occur during site building work. Experience derived from the research has shown the following attributes to be important: positive attitudes towards innovation; effective communication; careful planning and organisation; and good coordination and control at site level. These are all essential aspects of quality led management and determine to a large extent the overall success of this approach. Future work recommendations must include a more widespread use of innovative practices so that further design and construction modifications can be made. By doing this, productivity can be improved, cost savings made and better quality afforded.

A methodology for implementing a decision support system:a small company case study

The importance of non-technical factors in the design and implementation of information systems has been increasingly recognised by both researchers and practitioners, and recent literature highlights the need for new tools and techniques with an organisational, rather than technical, focus. The gap between what is technically possible and what is generally practised, is particularly wide in the sales and marketing field. This research describes the design and implementation of a decision support system (DSS) for marketing planning and control in a small, but complex company and examines the nature of the difficulties encountered. An intermediary with functional, rather than technical, expertise is used as a strategy for overcoming these by taking control of the whole of the systems design and implementation cycle. Given the practical nature of the research, an action research approach is adopted with the researcher undertaking this role. This approach provides a detailed case study of what actually happens during the DSS development cycle, allowing the influence of organisational factors to be captured. The findings of the research show how the main focus of the intermediary's role needs to be adapted over the systems development cycle; from coordination and liaison in the pre-design and design stages, to systems champion during the first part of the implementation stage, and finally to catalyst to ensure that the DSS is integrated into the decision-making process. Two practical marketing exercises are undertaken which illustrate the nature of the gap between the provision of information and its use. The lack of a formal approach to planning and control is shown to have a significant effect on the way the DSS is used and the role of the intermediary is extended successfully to accommodate this factor. This leads to the conclusion that for the DSS to play a fully effective role, small firms may need to introduce more structure into their marketing planning, and that the role of the intermediary, or Information Coordinator, should include the responsibility for introducing new techniques and ideas to aid with this.

Wealth effects of mergers and acquisitions for US firms: using alternative pricing models

This empirical study employs a different methodology to examine the change in wealth associated with mergers and acquisitions (M&As) for US firms. Specifically, we employ the standard CAPM, the Fama-French three-factor model and the Carhart four-factor models within the OLS and GJR-GARCH estimation methods to test the behaviour of the cumulative abnormal returns (CARs). Whilst the standard CAPM captures the variability of stock returns with the overall market, the Fama-French factors capture the risk factors that are important to investors. Additionally, augmenting the Fama-French three-factor model with the Carhart momentum factor to generate the four-factor captures additional pricing elements that may affect stock returns. Traditionally, estimates of abnormal returns (ARs) in M&As situations rely on the standard OLS estimation method. However, the standard OLS will provide inefficient estimates of the ARs if the data contain ARCH and asymmetric effects. To minimise this problem of estimation efficiency we re-estimated the ARs using GJR-GARCH estimation method. We find that there is variation in the results both as regards the choice models and estimation methods. Besides these variations in the estimated models and the choice of estimation methods, we also tested whether the ARs are affected by the degree of liquidity of the stocks and the size of the firm. We document significant positive post-announcement cumulative ARs (CARs) for target firm shareholders under both the OLS and GJR-GARCH methods across all three methodologies. However, post-event CARs for acquiring firm shareholders were insignificant for both sets of estimation methods under the three methodologies. The GJR-GARCH method seems to generate larger CARs than those of the OLS method. Using both market capitalization and trading volume as a measure of liquidity and the size of the firm, we observed strong return continuations in the medium firms relative to small and large firms for target shareholders. We consistently observed market efficiency in small and large firm. This implies that target firms for small and large firms overreact to new information resulting in a more efficient market. For acquirer firms, our measure of liquidity captures strong return continuations for small firms under the OLS estimates for both CAPM and Fama-French three-factor models, whilst under the GJR-GARCH estimates only for Carhart model. Post-announcement bootstrapping simulated CARs confirmed our earlier results.